Putting the Madoff disaster behind her, the one-time City "superwoman" Nicola
Horlick has reinvented herself as a financier, writes James Quinn.

She may have earned her reputation as one of the City's original "superwomen" in the late 1990s after juggling a large family at the same time as very publicly demanding her job back from her German superiors, but in recent years Nicola Horlick has been somewhat on the back foot.

After losing $20m (£12.7m) of investors' money to US ponzi scheme fraudster Bernie Madoff in December 2008, and following a bruising encounter with Vincent Tchenguiz, which saw her cede control of her flagship Bramdean Alternatives fund in 2009, it is perhaps not surprising that Horlick has tended to shy away from the world of high finance.

In recent years, she has focused her efforts away from the financial markets, raising money for private film ventures and a small chain of restaurants to be named after her daughter, Georgina, who died of leukaemia in 1998.

But this time Horlick is back – and focused on financing – albeit far from the Square Mile in which she made her name.

In her latest reinvention, Horlick, these days as at home around the table of BBC's Question Time as at the boardroom table, is channelling her efforts to help small and medium-sized companies that cannot raise money from banks. "We're in a situation where banks just aren't lending to companies of this size, and it can be extremely frustrating," she says.

"Companies often struggle because of a lack of capital, but debt is often not the right way. But we've now got a situation where a whole range of companies won't be able to get a [stock market] quote and they can't go to the bank, so what are they supposed to do?"

The answer, she affirms, can be found in Rockpool Investments. She is to become executive chairman of the new venture, and will spend, on average, three days a week working at it.

Rockpool is her brainchild, along with Gary Robins, founder of private investor network Hotbed, and Matt Taylor, formerly of Foresight Group.

In a nutshell, the business will allow wealthy individuals to invest in private companies using tax-efficient vehicles.

To this end, the pending launch of Rockpool has been timed to coincide with the Chancellor's changes to rules surrounding the Enterprise Investment Scheme (EIS), due to come into effect at the start of the next tax year on April 6.

The changes basically allow investors to reclaim 30pc of the cost of each investment against tax, investing as much as £1m a year, while the rules on the type of companies that can be invested in have also been relaxed, with a company allowed to receive as much as £10m of equity in one year, up from £2.5m, with the barrier on company size raised from those with employees of 50 or less to those with 250.

"It's one of the ways to get Britain to grow again," says an effusive Horlick. "What the Government is trying to drive people toward is getting legitimate tax relief. I see this as a big opportunity for the UK to become more entrepreneurial."

But is it so well timed, given data last week that indicate the UK is on the cusp of a double-dip recession?

Robins, who worked at private equity house 3i before setting up Hotbed, thinks it is. "Probably the best investments I made at 3i were in the 1991-92 era, when the economy was in a bad place, and then exiting them in the good times. The returns people were earning at that time were quite spectacular."

"It's the right time in the cycle," Horlick chips in, "and a more severe situation given what is happening with the banks."

In terms of sectors, Rockpool is currently assessing investments in a range of companies, varying from a clothing manufacturer to green technology and energy businesses.

"There isn't going to be a shortage of deals. Plenty of companies need money. And with the limit being raised to £10m, it opens EIS up to a different type of business, and so becomes less risky as the companies will be better developed."

The new business will work by offering two different ways of investing. For high-net worth individuals, Rockpool will offer the ability not only to invest directly in privatehigh-growth businesses, but also to get involved in their running through joining the board or providing expert advice. Robins hopes to lure 300 to 400 high-net worth individuals within the first two years of business to its members' network.

For those who are wealthy but do not have a spare million or five lying around, Rockpool will offer an EIS portfolio management service that will allow investments to be spread across a range of companies, but also allow the investor to choose to reinvest or take the money once a sale takes place.

"I think a lot of people have been put off by flexi-funds," Horlick says. A lot of people's money is stuck in these funds and people are feeling frustrated. Instead, each deal will be ring-fenced to allow clients to choose whether or not to reinvest."

The notion of allowing investors a more active role in the companies they choose to back is something Horlick appears to believe in strongly. "I think there is a degree of altruism, to be honest. I've already introduced a couple of business friends, and I can't think of anything better than experienced businesspeople giving their time to help out [smaller companies]."

But isn't it all a long way from her days in the City, when she famously took a barrage of 40 journalists to her bosses at Deutsche Morgan Greenfell as she demanded to hold on to her job? "My public equities days have been over since 2007. I got pretty bored. If it's the 23rd year running that you've gone to a Marks & Spencer's results presentation, it does become a little tedious."

That said, she does not think that what she is doing now is that different from what she used to do: "When I was at [SG] Warburg, for one-and-a-half years I worked on the business-expansion scheme," she says, citing her work on the precursor to the EIS model, and she has also used EIS schemes to fund her forays into the film world.

"I'm a fund manager, and this is fund management in effect. Private equity is a form of fund management."

Part of the Rockpool "sell" will involve a promise to keep investors as up to date as Rockpool itself with access to its own database, containing management information from portfolio companies.

"It is something done badly by the rest of the industry. I've got an investment in someone else's fund and I've just received the accounts relating to the third quarter of last year, and it's nearly February.

"People say that private equity is high risk. But the truth of the matter is that the investor has far more information than you would with a quoted company. So in many ways it's less risky, as long as they [the investments] are chosen wisely and properly monitored."

It will be Horlick's job – along with her new business partners – to ensure that happens, and that this latest chapter of the City superwoman's life does not end with the degree of Schadenfreude levelled at her following the Madoff loss.